Export Opportunities for U.S. Businesses
KEY TRADE INDICATORS
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ECONOMIC AND BUSINESS ENVIRONMENT
The recent events in Ukraine and Crimea have changed the landscape of the bilateral trade and investment relationship between the United States and Russia. Within these parameters, U.S. companies can still export their goods and services to Russia and continue working with their Russian partners to sustain and increase their sales in this market. However, companies should continuously monitor any developments concerning the United States’ political and economic relationship with Russia. It has the highest per capita GDP ($14,000) of the BRICS countries (Brazil, Russia, India, China, and South Africa). Russia is a high income country, with a highly educated and trained workforce and sophisticated, discerning consumers.
TOP INDUSTRY EXPORT OPPORTUNITIES
The increased need for modernized agricultural machinery in Russia is clear. Inadequate agricultural machinery and equipment still remains the weakness of Russian agricultural production. There is a need for equipment for seed production, cultivators and other soil preparation equipment including plows, harrows, cultivators, seeders, and fertilizer spreaders, equipment for dairy livestock breeding, swine, and poultry production.
The Russian auto industry is one of the major sectors of the domestic economy. Although the Russian government has been taking measures to stimulate the development of the industry, component manufacturing factories remain crippled by outdated equipment, lack of modern technologies, and inadequate management. Best prospects/services include; engine and engine components, steering components, brake system components, powertrain components, seat components, tires, interior components, specialty equipment for cars, new car dealerships, automotive aftermarket service and maintenance.
In the next five years, the federal government, regional governments, and private investors will spend at least RUB 664 billion ($21 billion) in preparation for the 2018 FIFA World Cup which includes major construction projects. Residential and commercial construction in the Moscow area is quite active and different projects are being implemented in both the middle and luxury segments, which creates opportunities for manufacturers of windows, doors and other finishing materials. Green building materials and energy saving technologies are experiencing increasing demand due to increasing utility tariffs.
TRADE REGULATIONS & CUSTOMS INFORMATION
In August 2012, following 18 years of negotiations, Russia became a member of the World Trade Organization (WTO), lowering the average bound tariff rate on industrial and consumer goods, from almost 10% to less than 8%. .
In addition to tariffs, there are two other charges applied to imports, the Value Added Tax (VAT) and selective excise taxes. The universal 18% VAT rate (with the exception of certain foodstuffs, pharmaceuticals and medical supplies, goods for children, and printed media for which VAT is 10%) is applied to the import price, tariff, and excise tax combined..
Import Requirements and Documentation
Importers are required to complete a Russian customs freight declaration for every item imported. A declaration must be supported by the following documents: contracts, commercial documents such as commercial invoices and packing lists, transport documents, import licenses (if applicable), certificates of conformity and/or safety (see "Product Standards" below) certificates of origin (if applicable), sanitary certificate (if applicable), import permission and licenses for products containing encryption technology, and documents confirming legitimacy of declarants/brokers/importers.
U.S. Export Controls
The EAR controls certain exports, reexports, or in-country transfers of purely commercial items, dual-use items, and less sensitive military items. “Dual-use” refers to items that have both commercial and military applications. U.S. exporters should consult the EAR for information on how export license requirements may apply to the sale of their goods to Russia.
Download Russia's Country Commercial Guide for more Customs and Trade Regulation Information
IMPORTANT COUNTRY GOVERNMENT ENTITIES
LOCAL U.S. SUPPORT CONTACT
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Source: U.S. Commercial Service